In this week’s TGIF, we consider the dangers of being the last one standing in ‘mothership’ preference claims. In the recent decision of In the matter of Bias Boating Pty Limited (receivers and managers appointed) (in liquidation) [2019] NSWSC 47, Black J ordered costs against a number of defendants to a preliminary question of insolvency even though they did not participate in the hearing of that question.

BACKGROUND

Westnet concerned an application under section 511 of the Corporations Act 2001 by a liquidator in a members’ voluntary winding-up, involving 10 related companies.

In underlying facts described by the Court as “very odd”, the court was asked to determine two questions:

This week’s TGIF considers some ways insolvency practitioners can make their lives easier by proactively using the courts to resolve uncertainty – such as liquidators seeking appointment as receivers of trust property as in the recent Federal Court decision of Freeman; In the matter of Blue Oasis Holdings Pty Ltd [2018] FCA 822.

WHAT HAPPENED?

Liquidators were appointed to the corporate trustee of a family trust.

The High Court of Australia unanimously reversed the decisions of the New South Wales Court of Appeal, and of Justice Black at first instance, in finding that liquidators cannot rely on the procedural court rules of a State or Territory to apply, outside the period allowed in the Corporations Act 2001 (Cth) (Corps Act), to extend the time within which they can bring voidable transaction proceedings under s. 588FF of Corps Act.

This week’s TGIF considers Arnautovic v Qaqour [2022] FCA 726 in which the Federal Court of Australia ordered a director of a company in liquidation to surrender his passport and prohibited him from travelling outside of NSW without the Court’s prior consent.

Key takeaways

This week’s TGIF considers the recent case of In the matter of Umberto Pty Ltd (in liq) [2018] FCA 541,which involved an application to appoint special purpose liquidators and to obtain the Court’s approval of their funding and legal arrangements.

What happened?

The recent appeal decision of the Full Court of the Federal Court in ASIC v Franklin (liquidator) and ors [2014] FCAFC 85 reinforces the importance of the independence of liquidators and also provides further guidance on the contents of declarations of independence, relevant relationships and indemnities (known as a “DIRRI”) by administrators.

This week’s TGIF considers Arnautovic v Qaqour [2022] FCA 726 in which the Federal Court of Australia ordered a director of a company in liquidation to surrender his passport and prohibited him from travelling outside of NSW without the Court’s prior consent.

Key takeaways

This week’s TGIF considers the case of Kreab Gavin Anderson (Australia) Ltd, in the matter of Kreab Gavin Anderson (Australia) Ltd (No 3) [2017] FCA 1473 and an application for approval of remuneration for work carried out by the applicants as administrators and then liquidators of the plaintiff company, in circumstances where those appointments were subsequently found to be invalid.

WHAT HAPPENED?

The High Court recently delivered judgment in the matter of Stewart v Atco Controls Pty Ltd (In Liquidation).^[1] The case turned on the application of the well-known principle in Universal Distributing